The Horses For Sources blog has been a great place to read comment on outsourcing for many years now. It became so popular and authoritative that the founder, Phil Fersht, managed to launch the innovative analyst company HfS Research. The contrarian approach of the blog has allowed the entire company to continue focusing on innovative research that sometimes exposes false trends and hype.
And so it was recently when an article on the blog commented on growth expectations in the Indian ITO and BPO sector. The Indian technology association NASSCOM is predicting strong growth in the sector of 7-9% and yet all the industry analysts, including HfS, are saying that they believe it will be more like 4-5%. Who is right?
As the blog points out, some of the more level-headed executives have accepted that the days of rapid growth in this type of outsourcing are over. For example, the contact centres that were once endlessly growing now need to accept that customers would actually prefer self-service systems. The way that brands and customers interact is changing fast and this will impact on the service companies that are serving them.
But the blog also notes that many company executives will not accept that their growth is slowing and they will reach out for the latest fad to help give the impression that innovation is about to save them. Some of the ideas mentioned are Artificial Intelligence, Blockchain, and Robotic Process Automation (RPA). This is typical executive behaviour. When a proven business model starts slowing down, reach out to “innovation” for a boost.
But some of the fads do have a genuine application. RPA for example. It really works and there are many examples of how it can be used to automate processes and deflect the need for a customer to interact with the brand through a customer service interaction.
The problem is that the executives who talk about these innovations as game-changing are not really accepting that the game has changed. They continue to talk about growth using old metrics, such as how many people work in their contact centre, and fail to see that in many cases, services are being delivered in a completely different way. New business models may be required and new charging structures are certainly required.
Strategies such as RPA are not just new services that can drum up additional revenue, they can entirely redefine how a business model works. As the HfS blog suggests, it’s time for executives to stop talking about AI, blockchain, and RPA as new sources of income and to start defining how these technologies might change, improve, or destroy their entire industry.